Acquisitions, investments and dispositions

We made the following acquisitions, investments and dispositions in the years 2012 through 2014:

2014: On Oct. 1, 2014, we acquired the remaining 73% interest in Cars.com (formerly known as Classified Ventures, LLC) for $1.83 billion. We funded the acquisition with additional borrowings and cash on hand. As part of the acquisition, Cars.com entered into new five year affiliation agreements with each of the former newspaper investors at economic terms much more favorable to Cars.com. Acquiring full ownership of Cars.com further accelerated our digital transformation and expanded our position in local media and marketing services in the automotive sector.

The purchase price was allocated to the tangible assets and identified intangible assets acquired based on their estimated fair values. The excess purchase price over those fair values was recorded as goodwill. At the acquisition date, the purchase price assigned to the acquired assets and assumed liabilities is summarized as follows:



In thousands of dollars
Cash and cash equivalents	$	43,767
Receivables and other current assets	108,577
Plant, property and equipment	17,399
Indefinite-lived intangible assets	872,320
Definite-lived intangible assets:
Customer relationships	789,540
Internally developed technology	69,500
Other	2,860
Investments and other noncurrent assets	14,598
Goodwill	715,970
Total assets acquired	2,634,531
Current liabilities	106,970
Other noncurrent liabilities	132,606
Total liabilities assumed	239,576
Net assets acquired	2,394,955
Less: acquisition date fair value of 26.9% equity interest	563,757
Acquisition purchase price	$	1,831,198

We recognized a $476.7 million pre-tax non-cash gain ($285.9 million after-tax) on the acquisition of Cars.com, which is comprised of a $396.7 million gain on the write-up of our prior 27% investment in Cars.com to fair value and an $80.0 million gain related to the required accounting for the pre-existing affiliate agreement between us and Cars.com. The net gain is included in Other non-operating items on the Consolidated Statements of Income. The impact to our Consolidated Statements of Income, net of intersegment eliminations, since the Oct. 1, 2014, acquisition date was $129.0 million of revenue and $33.6 million of operating income.

Customer relationships are being amortized over a weighted average life of eleven years and internally developed technology is being amortized over a weighted average life of seven years. Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and non-contractual relationships, as well as expected future synergies. We expect the purchase price allocated to goodwill and other indefinite-lived intangibles will be deductible for tax purposes. The initial purchase price allocation is preliminarily based upon all information available to us at the present time and is subject to change, and such changes could be material. We continue to review the underlying assumptions and valuation techniques utilized to calculate the fair value of primarily the Indefinite-lived and Definite-lived intangibles.

Pro forma information. The following table sets forth unaudited pro forma results of operations, assuming that the Cars.com acquisition, along with transactions necessary to finance the acquisition, occurred at the beginning of 2013:



	Unaudited
In thousands of dollars	2014		2013
Total revenues	$	6,340,703	$	5,563,472
Net income attributable to Gannett Co., Inc.	$	754,851	$	356,354

This pro forma financial information is based on historical results of operations, adjusted for the allocation of the purchase price and other acquisition accounting adjustments, and is not necessarily indicative of what our results would have been had we operated the businesses since the beginning of the annual period presented. The pro forma adjustments reflect amortization of intangibles and unfavorable contracts related to the fair value adjustments of the assets and liabilities acquired, additional interest expense related to the financing of the transactions, alignment of accounting policies and the related tax effects of the adjustments. Changes in affiliation agreements between Cars.com and its former investors that went in to effect on Oct. 1, 2014, were excluded from the pro forma adjustments dating back to the beginning of 2013. The pro forma table excludes adjustments for any other acquisitions in 2013 or 2014.

We incurred and expensed a total of $9.3 million of acquisition costs related to Cars.com for the year ended Dec. 28, 2014. Such costs were reflected in Other non-operating items in the Consolidated Statements of Income. These acquisition costs and the $285.9 million after-tax gain on the acquisition of Cars.com are not included in the pro forma amounts above as they are specifically related to the acquisition.

In February 2014, we completed the previously announced sale of KMOV-TV in St. Louis, MO, to Meredith Corporation, following regulatory approval. As a condition of the sale, Sander Media conveyed to Meredith Corporation substantially all of its assets used to operate KMOV-TV, which Sander Media acquired when the Gannett-Belo transaction closed on December 23, 2013. We conveyed certain other assets needed to provide services to KMOV-TV, which we also acquired from Belo.

In March 2014, Classified Ventures, in which we owned a 27% interest, agreed to sell Apartments.com to CoStar Group, Inc. for $585 million. This transaction closed on April 1, 2014. As a result of our ownership stake, we received a special $154.6 million distribution from Classified Ventures after the close of the transaction.

Early in the second quarter, our subsidiary CareerBuilder acquired Broadbean. Broadbean is a leading international job distribution, candidate sourcing and big data analytics software company. Broadbean is headquartered in London, United Kingdom and has offices in the U.S., France, Germany, the Netherlands and Australia.

In June 2014, we, along with Sander Media, LLC, completed the previously announced sale of KTVK-TV and KASW-TV in Phoenix, AZ, to Meredith Corporation. As part of the sale, Sander Media conveyed to Meredith substantially all of its assets used in the operation of both stations, which Sander Media acquired when the Belo transaction was completed in December 2013. We also conveyed certain other assets we used to provide services to both stations, which we acquired from the Belo transaction. At the closing, Meredith simultaneously conveyed KASW-TV to SagamoreHill of Phoenix, LLC, which through its affiliates, owns and operates two television stations in two markets. The total sale price of the Phoenix and St. Louis stations was $407.5 million plus working capital.

In July 2014, we acquired six London Broadcasting Company television stations in Texas for approximately $215.0 million in an all-cash transaction. We used proceeds of $134.9 million from the sale of the Phoenix and St. Louis stations to partially pay for these London Broadcasting Company stations via a tax efficient exchange. The acquisition included KCEN (NBC) in Waco-Temple-Bryan, KYTX (CBS) in Tyler-Longview, KIII (ABC) in Corpus Christi, KBMT (ABC) and its digital sub-current KJAC (NBC) in Beaumont-Port Arthur, KXVA (FOX) in Abilene-Sweetheart and KIDY (FOX) in San Angelo.

In August 2014, we announced our plan to create two publicly traded companies: one focused on our Broadcasting and Digital business, and the other on our Publishing business. The planned separation of the Publishing business will be implemented through a tax-free distribution of shares, of a new entity formed to hold our Publishing assets to our shareholders. We expect to complete the transaction mid-2015, subject to a number of customary conditions, including final approval of our Board of Directors, receipt of an opinion from tax counsel regarding the tax-free nature of the distribution, the effectiveness of Form 10 registration statement to be filed with the SEC in regard to the shares of the entity formed to hold our Publishing assets, and other customary matters. There can be no assurance regarding the ultimate timing of the proposed transaction or that it will be completed.

On Dec. 29, 2014, which was after the end of our fiscal year, we sold Gannett Healthcare Group (GHG) to OnCourse Learning, an online education and training provider. GHG is a leading provider of continuing education, certification test preparation, online recruitment, digital media, publications and related services for nurses and other healthcare professionals in the U.S. Net assets of $14.8 million for GHG were included in Assets held for sale on our Consolidated Balance Sheet as of Dec. 28, 2014.

2013: On Dec. 23, 2013, we completed the acquisition of Belo. The total cash consideration was $1.47 billion in addition to the assumption of $715 million in principal amount of outstanding Belo debt.

The source of the aggregate purchase price that we paid in the acquisition consisted of additional borrowings and cash on hand.

The purchase price was allocated to the tangible assets and identified intangible assets acquired based on their estimated fair values. The excess purchase price over those fair values was recorded as goodwill. The final allocated fair value of acquired assets and assumed liabilities is summarized as follows:



In thousands of dollars
Cash and cash equivalents	$	38,107
Receivables and other current assets	163,326
Assets held for sale	431,513
Plant, property and equipment	254,267
Indefinite-lived FCC licenses	835,900
Definite-lived intangible assets:
Retransmission agreements	99,803
Network affiliation agreements	33,978
Other	52,782
Investments and other noncurrent assets	52,902
Goodwill	928,739
Total assets acquired	2,891,317
Current liabilities	87,073
Deferred income taxes	514,450
Other noncurrent liabilities	76,500
Long-term debt	741,708
Total liabilities assumed	1,419,731
Net assets acquired	$	1,471,586

The retransmission agreements intangible assets are being amortized over a weighted average life of eight years and network affiliate agreements intangible assets are being amortized over a weighted average life of nine years. Acquired property and equipment are being depreciated on a straight-line basis over the respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and non-contractual relationships, as well as expected future synergies. We expect the purchase price allocated to goodwill and other indefinite-lived intangibles will not be deductible for tax purposes as no new tax basis in these intangibles was created due to the acquisition being a stock acquisition. The final allocation presented above is based upon our estimate of the fair values using valuation techniques including income, cost and market approaches.

Certain measurement period adjustments have been made since the initial allocation in the fourth quarter of 2013, which were not material to our consolidated financial statements.

Under the acquisition method of accounting, the results of the acquired operations for the 17 consolidated television stations are included in our financial statements beginning Dec. 23, 2013. Net broadcasting revenues and operating income of these stations included in our Consolidated Statements of Income were immaterial for the year ended Dec. 29, 2013.

We incurred and expensed a total of $33.0 million of acquisition costs for the year ended Dec. 29, 2013, related to the Belo acquisition. Such costs were reflected in Other non-operating items in the Consolidated Statements of Income.

In March 2013, CareerBuilder acquired Vietnam Online Network (KiemViec.com & HR Vietnam), Vietnam’s second largest career site by revenue, and first by number of registered users, specializing in recruitment services and human resource solutions for employers.

In April 2013, CareerBuilder acquired Oil and Gas Job Search (OilandGasJobSearch.com). Headquartered in England, Oil and Gas Job Search is the oil and gas industry’s leading online job site outside North America with job postings worldwide.

2012: In January 2012, we acquired the assets of Fantasy Sports Ventures/Big Lead Sports, a leading sports digital site.

In April 2012, CareerBuilder acquired two new businesses: Ceviu and Top Language Jobs. Ceviu is the leading information technology job board in Brazil. Top Language Jobs is Europe’s number one language specialist recruitment job portal. It operates the largest global network of job boards dedicated to multilingual job seekers looking for work internationally.

In August 2012, we completed the acquisition of BLiNQ Media, LLC, a leading global innovator of social engagement advertising solutions for agencies and brands.

In September 2012, we acquired Mobestream Media, developer of the Key Ring consumer rewards mobile platform (Key Ring) available on all major smartphones.

Also in September 2012, CareerBuilder acquired a controlling interest in EMSI. EMSI is an economic software firm that specializes in employment data and labor market analysis. EMSI collects and interprets large amounts of labor data, which is used in work force development and talent strategy.

In October 2012, we acquired Rovion. Rovion’s primary product, Ad Composer, includes a self-service technology platform that enables the full development and deployment of rich media and mobile HTML5 ads by clients which lack coding expertise.